Chart 04 — Historical Drawdowns & Bear Case Math

This Stock Has Fallen 52% Before. It Can Again.

Historical peak-to-trough drawdowns in prior cycles vs projected bear case at current valuation
Peak-to-Trough Drawdown History
Bear Case at Current Entry
Potential Drawdown
-34% to -52%
From $945 → $450–$622 in a hyperscaler capex pause + multiple de-rate scenario. This is not a tail risk — it's the bear analyst target range.
Historical Pattern
+1,076%
From 52-week low of $80 to today's $945. Every major correction in $LITE history has been followed by a violent recovery — for those who held conviction.
The Lesson from Lumentum's History
Between 2020 and 2024, $LITE fell -70% from its all-time peak. Anyone who bought at the 2022 highs waited over two years just to get back to breakeven. The business was fine — optically, technologically, competitively fine. But the stock price was not. Valuation entry point matters enormously for this name, more than almost any other stock in the AI infrastructure complex.
Sources: Historical price data from Yahoo Finance. Drawdown periods: 2020 cycle (COVID-recovery peak ~$120 to trough ~$57), 2022 cycle (FY2022 peak ~$135 to FY2024 trough ~$38), 2025 trough ($80 52-week low). Bear case drawdown calculated from current $945 price. This is historical pattern analysis, not a prediction.
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